4 Biotech Stocks Triggering Breakout Trades - views

DELAFIELD, Wis. (Stockpickr) -- Professional traders running mutual funds and hedge funds don't just look at a stock's price moves; they also track big changes in volume activity. Often when above-average volume moves into an equity, it precedes a large spike in volatility.

Major moves in volume can signal unusual activity, such as insider buying or selling -- or buying or selling by "superinvestors."

Unusual volume can also be a major signal that hedge funds and momentum traders are piling into a stock ahead of a catalyst. These types of traders like to get in well before a large spike, so it's always a smart move to monitor unusual volume. That said, remember to combine trend and price action with unusual volume. Put them all together to help you decipher the next big trend for any stock.

Vanda Pharmaceuticals (VNDA) is a biopharmaceutical company focusing on the development and commercialization of clinical-stage drug candidates for central nervous system disorders. This stock closed up 9.1% to $13.03 in Wednesday's trading session.

From a technical perspective, VNDA ripped higher here and broke out above some near-term overhead resistance levels at $12.34 to $12.66 with heavy upside volume. This move is quickly pushing shares of VNDA within range of triggering another big breakout trade. That trade will hit if VNDA manages to take out Wednesday's high at $13.11 to its 52-week high at $13.30 with high volume.

Traders should now look for long-biased trades in VNDA as long as it's trending above that first breakout level at $12.34 or above support at $12 and then once it sustains a move or close above those breakout levels with volume that hits near or above 1.01 million shares. If that breakout hits soon, then VNDA will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that move are $15 to $17.

From a technical perspective, TTPH ripped sharply higher here with heavy upside volume. This stock has been uptrending strong for the last two months and change, with shares moving higher from its low of $7.37 to its recent high of $10.85. During that uptrend, shares of TTPH have been consistently making higher lows and higher highs, which is bullish technical price action. That move is quickly pushing shares of TTPH within range of triggering a big breakout trade. That trade will hit if TTPH manages to take out Wednesday's high of $10.55 to its all-time high at $10.85 with high volume.

Traders should now look for long-biased trades in TTPH as long as it's trending above Wednesday's low of $9.40 or above some key near-term support at $8.72 and then once it sustains a move or close above those breakout levels with volume that this near or above 104,961 shares. If that breakout hits soon, then TTPH will set up to enter new all-time high territory, which is bullish technical price action. Some possible upside targets off that breakout are $13 to $15.

Sangamo BioSciences

Sangamo BioSciences (SGMO) is a clinical stage biopharmaceutical company engaged in the research, development and commercialization of engineered DNA-binding proteins for the development of novel therapeutic strategies for unmet medical needs. This stock closed up 4.8% at $11.09 in Wednesday's trading session.

From a technical perspective, SGMO spiked notably higher here right above some near-term support at $10.46 with strong upside volume. This stock has been uptrending strong for the last three months, with shares moving higher from its low of $6.86 to its recent high of $11.48. During that move, shares of SGMO have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of SGMO within range of triggering a big breakout trade. That trade will hit if SGMO manages to take out Wednesday's high of $11.23 to its 52-week high at $11.48 with high volume.

Traders should now look for long-biased trades in SGMO as long as it's trending above support at $10.46 or its 50-day at $10.04, and then once it sustains a move or close above those breakout levels with volume that's near or above 682,073 shares. If that breakout hits soon, then SGMO will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that move are $13 to $15.

Repros Therapeutics

Repros Therapeutics (RPRX) is development stage biopharmaceutical company focused on the development of oral small molecule drugs for major unmet medical needs in male and female health. This stock closed up 8.8% at $25.97 in Wednesday's trading session.

Wednesday's Volume: 3.95 million

Three-Month Average Volume: 615,575

Volume % Change: 549%

Shares of RPRX soared on Wednesday after the company said it is completely satisfied that all the data entered into the data base for study ZA-301 will pass any scrutiny the FDA chooses to apply.

From a technical perspective, RPRX spiked sharply higher here with heavy upside volume. This is the second day in a row that shares of RPRX have spiked notably higher with big upside volume. This move is starting to push shares of RPRX within range of triggering a near-term breakout trade. That trade will hit if RPRX manages to take out Wednesday's high of $27.39 to its 52-week high at $28.30 with high volume.

Traders should now look for long-biased trades in RPRX as long as it's trending above $24 or $23 and then once it sustains a move or close above those breakout levels with volume that's near or above 615,575 shares. If that breakout hits soon, then RPRX will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $30 to $32.

At the time of publication, author had no positions in stocks mentioned.

Roberto Pedone, based out of Delafield, Wis., is an independent trader who focuses on technical analysis for small- and large-cap stocks, options, futures, commodities and currencies. Roberto studied international business at the Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany. His work has appeared on financial outlets including CNBC.com and Forbes.com. You can follow Pedone on Twitter at www.twitter.com/zerosum24 or @zerosum24.